North Carolina is gearing up to use new federal funds aimed at improving health care in rural communities. This move comes after years of struggling with provider shortages and limited access to care.
In a recent virtual town hall, N.C. health officials shared their plans for the Rural Health Transformation Program. This program is part of a federal budget passed last summer, which cut about $900 billion from Medicaid spending over the next decade. However, lawmakers included a $50 billion fund to support rural areas heavily reliant on Medicaid.
Recently, the Centers for Medicare and Medicaid Services awarded North Carolina $213 million for this transformation in 2026. It’s the first of five annual payments that could total more than $1 billion if the state meets specific performance targets.
Devdutta Sangvai, leader of the N.C. Department of Health and Human Services (DHHS), stated this funding is a “once-in-a-lifetime opportunity.” Over the next five years, the aim is to create lasting health changes in communities where access to care is a significant issue.
The state’s initial proposal is broad, focusing on ideas rather than detailed plans. Deborah Farrington, deputy secretary of health for DHHS, mentioned that they will need to develop concrete strategies with clear timelines and responsibilities in the coming months. Core initiatives will target improving primary and preventive care, integrating behavioral health, and strengthening the rural health workforce.
Rural areas in North Carolina face higher rates of chronic diseases and maternal care deserts, which contribute to pregnancy-related complications and higher infant mortality rates. For example, diabetes rates are approximately 17% higher in rural communities compared to urban ones.
A key part of the plan includes setting up regional “ROOTS” hubs—short for Rural Organizations Orchestrating Transformation for Sustainability. These hubs will act as local networks that bring together hospitals, primary care practices, and behavioral health services to provide a more coordinated care system.
However, this new funding comes amid significant Medicaid cuts that could further strain health providers in rural areas. Governor Josh Stein emphasized the need to mitigate the impact of these cuts, which could limit access to essential services.
Additionally, lawmakers have raised concerns about the definition of “rural.” Some suggest that the criteria used might exclude certain communities that desperately need help. This has sparked discussions about ensuring that the funds reach the areas with the most pressing access issues.
Despite these concerns, the state is determined to use the funds effectively to transform health care in rural North Carolina. As they move forward, it will be crucial to monitor how these initiatives unfold and whether they truly meet the needs of rural residents.
For more insights on health policies affecting rural communities, check out the Centers for Medicare and Medicaid Services for updates.
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